that's my pr advice, once he wakes up on saturday, he's going to have a lot of explaining to do. >> i know a guy in new jersey who actually sold all of his stocks right before y2k because he thought he would be able to speculate and bar water. so yeah. melissa: , should he have? >> i don't know for sure. i respect the fact that he tried to get the people out of water. melissa: okay, that's it for tonight. that is all the "money" we have for you. "the willis report" is coming up

next. gerri: hello, everybody. i am gerri willis. it is a war of words over the fiscal cliff in washington. the president blasting republicans today for their refusal to take his latest offer, calling it puzzling. republicans are doubling down on the plan b. he called the veto threat bizarre and irrational. $500 billion in tax hikes closer to every american. >> there has to be a recognition on the part of my republican friends that take the deal. but they keep on finding ways to say no.

i don't know how much of that just has to do with this. it is very hard for them to say yes to me. gerri: what he stated that? >> it is incredibly sad and frustrating, that's what that is. the president, through the entire campaign, says he wants a balanced approach. we have increased spending from 2007 to 2012. $1 trillion. year over year. a trillion dollars. revenues at record highs.

>> let's talk for a second about the republican response. gerri: white house is opposition for the backup plan. it is growing more bizarre and irrational by today. is this the kind of conversation that is going to get something done in washington? or is it only going to make people angry or? >> the speaker is never the one who is happy in the meetings with the president. lots of behind-the-scenes stuff. what we want to do. gerri: speaker boehner said that over and over again. there is a war of words.

people are yelling at each other and calling each other nasty names. meanwhile, one of the big rating agencies that reads this country's debt, here's what they said today. failure to avoid the fiscal cliff would exacerbate rather than diminish the uncertainty of the fiscal policy and to the u.s. into an unavoidable and unnecessary recession. the u.s. could lose its aaa status. this is from fitch ratings. wait until you see what we are going to have to spend for our debt if we lose the aaa status. because it will cost us more to float our bonds. what is being done right now? not to escalate the war of words, but to find some common ground. >> the houses focused on passing a tax policy. senate and have them respond. what is now a look at is the

sequestration piece. the president refuses to deal with the side and we have to do this. last summer we were talking about the same issues were the bomb folks were saying that if there is not real spending reductions, if we don't get a plan, the automatic spending cuts kick in. the president is asking to turn those off, that sends a signal as well that we are not serious about reducing spending. this is the absolute worst way to reduce spending. it is the only option that we have. gerri: thank you for coming on the show tonight. meanwhile, tensions escalate during the fiscal cliff talks and i am joined by jake tapper, chief white house correspondent. the author of the brands making new book, the outpost, and untold story of american valor. let's talk about the book in a minute, but i have to ask you about the thing that everyone is talking about. and that is the very tough question to the president.

here it is. >> this is not the first issue of gun violence. where have you been? united states dealing with the worst economic depression since the great depression. two wars, i don't think i've been on vacation. gerri: he got under the president's skin. is that the problem? or is media generally to easier on the president? >> i'm not going to address that, as i think you know. [laughter] but here's where here is where i was coming from. i covered columbine. i know jim and sarah brady. i was sitting about the fact that this room had been named after jim brady, who was severely wounded in the assassination attempt on president reagan. this is not the first one of

these horrific he massacres that i have covered from the white house perspective. whether you're talking about aurora colorado or quote of the. there have been a number of these. and they are awful. whether it is law enforcement pushing for a ban on certain types of my automatic rifles. or in the gun-control community, like sarah brady, who has been very critical of the president. it seems that this is new for him to be talking about action like this. his policy is to be proactive. he hasn't really done that. so i just thought it was time to

ask them how come he hasn't done anything until now. gerri: incher was direct. we are looking at the rhetoric. the democratic party, you know, the republican party using the phrase bizarre. it seems like the rhetoric's are ratcheting it up a notch. >> it is tough to tell right now if this is the rhetoric that you hear before a deal was cut or if this is actual animosity. i think it is probably the latter. president obama had a lot of his officials, including treasury secretary geiger and others meeting with some business leaders today. including the chamber of commerce and the national association of gun control.

they feel that it undercuts the whole compromise that they have been working on. keeping fingers crossed. gerri: i do want to talk to you about your book, "the outpost." just two years in the making, how did you ever find time to write this book? >> well, it became something of a mission for me to tell the stories of these troops. as i told you once privately, i was in the hospital with my newborn son, jack. i looked up in the recovery room and saw this report about an attack on the outpost. [inaudible] it was a devastating attack. a u.s. troops were killed that

day. i thought perhaps we need some light shine upon them. gerri: blame both sides of the coin. you find fault with bush and obama. it's not like you're telling the tale from one point of view. >> i try not to. needing the assets and needing the manpower that they need to do. we see the direct result of that. you also see the result of president obama. obviously, it sure came a wild

to surge more. then there was this situation that took place in afghanistan. but i did try to draw a line between some of these decisions and these privates and sergeants and lieutenants on the ground there. >> welcome the book is fascinating. getting great reviews. thank you so much for coming on tonight. really appreciate it. gerri: there is even greater anxiety growing in farm country. congress hasn't completed work on the farm bill. that expired in september. here is why it is a problem. if the farm bill is not centered, farmers will be forced to return to old-fashioned system for pricing milk.

the translation is higher prices for consumers. it contains basic provisions for setting prices. guaranteed a minnmum price of producer costs and farmers costs. armor is on the consumer market, even at a lower price, because they sell more products. in other words, farmers selling their dairy products to the government instead of the private market, and of course, prices will skyrocket. some farmers say that that would send milk prices to $6 per gallon. can you imagine the? blog is superseded every time a new farm bill is passed. but no new bill goes back into effect if any extension is passed. how likely is it that the situation will get resolved? here's what tom vilsack said. there is a very serious risk that we may not get farm bill this year. imagine congress acting quickly on something important for the american people.

well, maybe when pigs fly, or callous, in that case. coming up after the break, more on the fiscal cliff folly in washington. lawmakers and the president -- on their policy to compromise. is that even possible? and what i think about that choice in 15 minutes

ally bank. why they have a raise your rate cd. tonight our guest, thomas sargent. nobel laureate in economics, and one of the most cited economists in the world. professor sargent, can you tell me what cd rates will be in two years? no. if he can't, no one can. that's why ally has a raise your rate cd. ally bank. your money needs an ally.

the one president obama saying that he is hopeful for a fiscal cliff deal before christmas. the only thing washington thinks they agree on is political posturing. this compromise too far out of reach? with oneness, we have the director of the wall street editorial page and editor of reason.com. dam, let's start with you. how likely is it that we get some kind of deal? you said maybe not. >> i don't think so, gerri. the republicans and the president are really far apart. they have been far apart since summer of 2011 will cut the deficit superhuman i couldn't agree on anything. that is why we are getting a situation that with the sequester. what is becoming clear to people is that for the republicans, it is in part to the tax increases, but in the house, it is the fact that the democrats won't commit on sunday. so they are being asked to make a hard commitment on tax increases that are real.

the one we know exactly how that goes because we have seen a before. >> yes, that song and dance has been heard before. but i would argue that if there is a plan in place by december 31, it won't matter. when you look 10 years now, according to the republican plan, there will be x amount of debt. this isn't solving anything. i would question dan to say, he's right that obama won't commit on spending, but the republicans also what about details. if they really believe that spending is the problem, they ought to lay out what they are going to do. what are they talking about? a trillion dollars? >> i think they are committed to making adjustments to medicare and to medicaid and social security. but the democrats have made it clear that social security is off the table. they don't want to touch medicaid. they are really not going to do much of anything about medicare. they really don't want to reform the entitlement commitments that are being made into the vast.

>> i don't necessarily disagree about that, buu what the republicans are offering is so puny compared to the scope of the problem. if they want to sell themselves out, as a true alternative, one which would have a lot of popular support, where they would actually make the case. we need to radically retrench on government spending. gerri: we took a look at the two plants on the table right now. the impact on the debt, if either of them go into effect, they are virtually the same size. $21 trillion in debt. let me finish. $21 trillion. your kids, it is unconscionable. you know, i agree with the pox on both your houses idea. i want to see tax reform. i want to see big changes. >> it's what he wants he can get more economic growth. we need close to 4% economic

growth to begin to address these problems. from day one, the presidents proposal to raise taxes on people, it adds up to only 7.5% of the annual deficit. it is a flyspeck. gerri: don't think it has been so busy, the new york delegation, saying that it will affect 90% of people in metropolitan areas? >> if you're not paying a next year, thank the new york delegation. they are the ones leaving it. gerri: big news, gm by 40% stake in the company. >> castillo is about $50 billion. the prices of stock have to get up to $69, it's down around 24 right now. i'm not going to hold my breath on that one. but i think that gm understood that it had to do something. because its own internal polling and focus groups suggest there

was a stigma -- as public attached a stigma that they had taken this public money, which is very interesting to me. it may have helped rocco, when michigan and ohio, but it didn't help gm. >> gm is giving the stock at a bargain. the ipo is $10 more per share. the one that's just terrible. >> i think that the government should get out of this quickly as possible. obviously you want to do it in an orderly fashion. the were never going to happen again. who president of the government actually taking over, taking a controlling share, calling shots, who is going to be the ceo and stuff like that. the sooner we get past that, the better. gerri: it has to be a new day. dan and neck, thank you both for coming on today. great conversation. if you are fired up about this, drop me an e-mail at gerri@foxbussiness.com.

>> coming up on "the willis report", do you want another four years? gerri breaks it down next. and the many deceptions of obamacare. >> if you like your doctor, you will be able to keep your doctor. it turns out that this is not the only lie when it comes to the president's health care law. our panel of experts weigh-in. also, this photo sharing service causing major mayhem in the social networking world. we will tell you why you might want to think twice before you post your next picture. we are on the case on the lewis report copd makes it hard to breathe,

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vair contains both an anti-inflammatory and a long-acting bronchodilator working together to lp improve your lung function all day. advair won't replace fast-acting inhalers for sudden symptoms and should not be used more than twice a day. people with pd taking advair may have a higher chance of pneumonia. advair may increase your risk of osteoporosis and some eye problems. tell your doctor if you have a heart condition or high blood pressure before taking advair. if you're still having difficulty breathing, ask your dtor if including advair could help improve your lung function. get your first prescription free and save on refills at advaircopd.com. gerri: time magazine named president obama as person of the year. i will tell you what i think in 60 seconds.

the one drumroll, please. time magazine has named person of the year barack obama. it's not so surprising. it's the president. the editors commend the president for building what they call a coalition that spells the definition of american politics. is that i think we meant i thought that was a good thing? craziness, right? and there are things that time magazine didn't even mention their stories. the most astonishing one in roanoke, virginia. it is about how the government is part of all that is good. >> f you have a business, you can build out. somebody else made that happen.

gerri: no, it wasn't just a one-time plan. the president had shown just how out of touch he was with the private sector when he had skyhigh unemployment and economic growth that was anemic. he said this. >> the private sector is doing fine. gerri: okay, not only does the president not seem to have respect for the private sector and fails to grasp economic essentials, but he also has a novel approach to international relations. striking special deals and hushed conversation with the russian president. the president said this. >> after my election i will helpful flex ability. gerri: a president that doesn't understand the private sector. the backbone of this country, and trying to get his arms around the nuances of diplomatic

relations. do you want to know my recommendation for the person of your? it is this young pakistani teenager. she is 15 years old. she stood up for her rights to obtain an education and was, as a result, brutally attacked by the taliban on a bus on the way home in pakistan. she was shot in the head. she was shot for being female and wanting to get an education. it didn't square with islamic extremists. she was recovering in england. she continues to assert basic rights for women. the editors at time magazine didn't see that as a first-place finish. but here's our question tonight. this president obama deserve to be the person of the year in time magazine? log into gerriwillis.com, vote

on the right-hand side of the screen and i will show you the results at the end of tonight's show. when we come back, the fiscal cliff capturing the headlines. in many forgetting that obamacare will start rolling out next year. many are dreaming of a white christmas and they are dreaming of a profitable one. in a shocking supporting holiday season still to come.

gerri: breaking news tonight. impossible combination between intercontinental exchange in the and the nyse. >> this isn't a done deal, but it will definitely be announced on the new york stock exchange is going to enter into a

definitive merger talk. or is the thing, they got the deal, they need regulatory approval. as you recall, when the new york stock exchange was trying to team up, regulators put a clamp on that. this is a little different. it's not transcontinental. it is united states-based. the ice is an electronic exchange. it is not quite the same. it doesn't do the same sort of stuff that the new york stock exchange does, which trade enlists equities. a lot of other derivatives and things of that nature. it looks like this deal could be passed on the notion that -- or get regulatory approval. on the notion that it doesn't necessarily form a monopoly. in the morning you will see a press release that says that they plan to merge. it will be a fairly lengthy process from what we understand in terms of getting the deal done. how much of this is worth? i cannot tell you. honestly, the new york stock exchange would be buying the intercontinental exchange. you know, interesting enough, as

the other deal, which i think he believes can be an enhancement. we should also point out, and here is the strange bedfellows sort of thing. last year on the new york stock exchange was in the middle of its merger negotiations, the nasdaq teamed up on a potentially hostile bid for the new york stock exchange. select you can see, all of these guys are enemies, but then they become friends if they could smell a business deal. this is a pretty big story. it is breaking down. i don't exactly know the terms and conditions. i don't know how much it would cost. we are talking clearly in the billions. it is somewhat transformative or the new york stock exchange. not as transformative as the other one.

the ice is -- it's basically a commodities oriented exchange. it is a big sort of competitor it does add a wrinkle into the exchanges. exchanges are like utilities. they were partnerships. owned by the guys that traded on the floor of the new york stock exchange. they were known as the holders. all these exchanges are shares of the new york stock exchange they are trying to do deals and create synergies. you agree synergies where you can cross market sales. this is more than just in the weeds wall street. these are all public companies. it would be great to show a stock chart. shares are up fairly

significantly right now. gerri: great call on this story. i love your analogy. good stuff. thank you, charlie, thank you for coming on tonight. we appreciate it. well, obamacare regulations are starting to hit the fan. and obama's signature law is riddled a slew of deadlines. former health care advisor to mitt romney, doctor scott gottlieb. you have worked with mitt romney, is that correct? >> yes. gerri: i want to start with something that came out from the american action form. that was a study that found the obama administration has missed nearly half of the regulatory deadlines and obamacare. normally there is time for consumers to get involved in conversation, the time frames

have shortened. we make of this? >> is pretty simple. if you want to take one thing of the economy, its hardware. you can do with just a couple dozen bureaucrats in washington. so it's not surprising at all that implementation has been rough. i think i will continue. where it will really hit people is when people think they are going to get new coverage, coverage of the cost a lot of money. the cost is going to skyrocket by as much as 100% by young people looking for insurance and trying to buy it for themselves. gerri: will you make of this to . >> the people who regulations.gov, relations relating to obamacare and the administration hasn't been giving people to comment on these major roles. it should have at least 180 days. they are trying to get this done very quickly around the holidays. gerri: we will know it means when we read it. [laughter] gerri: you know, i know you guys have somewhat different ideas about the possibility of

obamacare. let me start with you. the republicans are talking about repeal. is that even a possibility at this point? >> nothing is impossible, but i think it's very hard. once the subsidies in the trillions of dollars of subsidies go through the system, how do you take that away from people? we try to change medicare in some ways, it's really hard to do. performing the broader health care system in a better way, you would have to do a lot to change the way obamacare works. >> you would have to change the structure of the federal law. the problem with the obamacare exchanges is that it regulates what plans can go into marketplaces. >> these are the insurance exchanges that are offered on a state-by-state basis. gerri: some of them are saying now. moving on to another story quickly that we have been

following. i think you will both find it interesting. a new report from health and human services inspector general, finding incredible waste and mismanagement of medicare. take a look at these numbers. 191, medicare pays 919. just unbelievable numbers of waste and fraud and abuse. to you, scott, first. we make of this? all the utilization has been done with paper audit. not a good way to manage compliance. they will not build to ensure the eligibility. to administer this at a local level where you can have private companies or local companies actually looking over the utilization and care that is being delivered. >> it is easy to waste other people's money. if it's not your money, you're not going to waste your own money as much. the government is just rubberstamping these checks to

doctors and hospitals and criminals who are exploiting the system. of course there is going to be waste. there's nothing that washington can do. gerri: obamacare really didn't do that. it seemed to have made some of the problems worse and not better. >> i think that's right. now it's there, we're stuck with it. we have to see what we can do. we do this in the investment community all the time. we say starting from today, regardless of what happened before, what would our portfolio look like today? the same with health care. we have to look back and say, how do we take with the whole system is and try to do something. >> the problem is destruction and health care. so much consolidation has been seen in the marketplace that will be hard to go back and market-based this program. gerri: thank you both for coming on. this is a fascinating conversation. it's great to have you on, happy holidays. >> merry christmas. gerri: more breaking news tonight. the house that to vote on speaker boehner's land

transport. rich edson has more. >> these are the automatic spending cuts that are supposed to hit the economy in january. the total for next year is about $94 billion. the house will not only go to protect those earning a million dollars a year or less from a tax rate increase or any tax rate increase, that includes investment income, but they will also have a vote tomorrow that replaces the first year of what is known as the sequester. the $90 billion in cuts next year with cuts elsewhere in the federal government. originally the house was and when did you now it addresses that in their vote tomorrow. not sure what time it will go. again, the automatic spending cuts, after the military and other domestic spending, the house will go to replacement tomorrow along with protecting those earning less than a million dollars a year from a tax increase. gerri: thank you for bringing it to us. thank you for your time.

still to come, more fallout from instagram. the switch on handling your photos. after a thanksgiving weekend frenzy, holiday shopping is fizzling out. find out why and what retailers are doing about it coming up next. you know how painful hetburn can be. for fast, long lasting relief, use doctor recoended gaviscon®. only gaviscon® forms a protective barrier that helps block stomach acid from splashing up- relieving the pain quickly. try fast,ong lasting gaviscon®.

gerri: retailers right now, the holiday season. some consumers aren't buying into it. latest forecast is dropping from

a 3.3% increase to 2.5%. despite the fact that most consumers haven't finished their holiday shopping with just five days ago until christmas. what gives? we are so pleased to have you here today. you are probably one of the most knowledgeable people in the country on retail. you know, i was mentioning that it seemssto me that there is so much discounting going on. i can't believe anyone is making a profit off their. >> they really are making money. retailers make money even when the market product down close to 50%. again, it depends on the category. when they go beyond that, that's when they start eroding the market. even if they have some markdowns, they can still sell other items were they make money in a. gerri: let's talk about wal-mart, which is doing this right now. they are offering the iphone-5 for $127.

they are eating at $63 discount with a two-year contract. when you make of that? is that a smart business move? >> this is all about driving traffic. the iphone-5 is in the highest gift items for the holiday this year. what they are doing is jumping to drive traffic into the store. consumers don't usually buy one item in one hour. it is all about getting an impulsive interest. gerri: so there's nothing other really john consumers like magnets or quasi? >> it is really retail and not a facet of responsibility. it is really a wake-up call. we have been trying to do this room price discounting. consumers have basically shown as they are going to wait to the holidays because they know they will get better prices. but without new and exciting merchandise to drive the consumer to say i am willing to go and spend my own money and really do all of these things to try to get the excitement back

into the next, retailers have not been doing a good job of that. gerri: changing the topic here for a little bit, what is going on in the aftermath of the newtown school shootings? dick's sporting goods, stopping the sale of guns, the aftermath of that. they are not the only ones. others are saying the same thing. >> it's hard to comment on any management position. but when a company recognizes that there has been a catastrophic event, it is really good for them to remove themselves in any of the products that contribute to that equation. we have certainly seen other companies mismanage listings. it has hurt the reputation and even the management themselves. this is a good move. this is about making sure that everyone is aware that they are doing what they feel is the responsible thing.

gerri: thank you for your time today. still to come, my "two cents more". instagram and its controversial move regarding your photos. is it too little too late to save the brand's reputation? coming up next

gerri: the recent move of a social media site. your privacy could be at stake. details coming up next.

gerri: just moments ago, charlie gasparino broke the story of

intercontinental exchange. >> this is shaping up to be more of a takeover. sources are telling us if this doesn't lead to eyes taking over the new york stock exchange. the intercontinental exchange has twice as large as a market cap as the newer stock exchange. it is in the neighborhood of $9 billion or more. the new york stock exchange is a million dollars more. it is a takeover. we should point out that the management has not been determined just yet. this is a big story. the new york stock exchange has been known as the epicenter of finance.

that independence is a hallmark of an exchange on the floor. people traded, and they still do that over there. we should point out under this deal, the intercontinental exchange, i believe that it essentially a computer. the computer will be taking over this sort of hollow ground of capitalism, which is the new york stock exchange if this deal goes through. it is, i guess you could say, a story of technology. [talking over each other] >> a computer is taking over the iconic new york stock exchange.

>> the new york stock exchange is primarily dealing with the market making of stocks. the buying and selling of equities. it will bring derivatives, commodities, all of these other things, other securities that are sold by companies and traded in the market. it will bring that to a brand of the new york stock exchange, which is one of the premier brands. i think it's fair to say the new york stock exchange as the premier brand for the trading of stocks in the market. it is going to merge those two together, and that's a pretty powerful, nation. they teamed up with i.c.e. earlier in the year. we should point out that the deutsche banc teamed up as well

and i created a massive and her global exchange. that was turned down by global regulators. i think it has a better shot. because it's not all the stocks in one place. gerri: you said that there is going to be a big announcement tomorrow morning. how is this going to be rolled out, do you think? >> i think it will come out tomorrow. i don't know if there will be a press conference. watch them do a press conference just to prove me wrong. that is what i heard. you know, i think that the ceo of the new york stock exchange is probably going to speak with people tomorrow. we should point out that the guy that owns the i.c.e., i believe he has a good relationship with liz claman. he takes a much more backseat approach on a lot of stuff. so we will see exactly how this

is ruled out. this is a takeover whether you like it or not. the iconic york stock exchange. it won't be running the show. the deutsche bank is going to takeover the new york stock exchange, but nyse management was going to deal with this stuff. gerri: quickly i would like to ask you. every journalist in new york knows duncan. it seems that his oneness combined company is not so hot. >> half-and-half. duncan has been there for a while. what better way to do the exit of the transformational deal and make sure that there is a lot of money. not a bad way to leave. given the way that some people with wall street. he's not an old guy, he's about 55 years old. he is a very ambitious guy in a

good way. and i think you would like to run something. you know, maybe he can -- maybe he can go back. i don't know. but this is the guy we're going to be talking about for a while in terms of jurors someplace else. it will be interesting to see the management. we are all focused on duncan. he is being acquired by the dude in atlanta -- what is his name? i don't talk to him. the guy that runs i.c.e. by the way, a multi-gazillion her. gerri: that's right, he's a very important dude. >> he doesn't get a lot of play, he likes staying under the radar for the last time he was out of the radar was when he teamed up in new york. gerri: charlie, what does this tell you about the state of the stock market business. companies are public now. these aren't organizations that come together for the good of

everybody. these are companies that have to make money. >> we just talked about a narrative thread. no one they want the retail low end they get retail broker orders. the high frequency trading, and they need that business. he is feeling the same pension. people are trading stocks. he has to diversify and go to other businesses. quite frankly, either has to buy something, build it, or merge with something to create@ shareholder value. the best way to create it is to merge with a firm. nyse's